Kelsey and Camille Grammer Settle Custody Battle But Are Still At War?

Sources tell TMZ ... the agreement outlines who gets the kids, when and where, etc. We're told Camille will have both kids more than Kelsey, but the agreement accommodates Kelsey's work schedule.

The kids will not be separated. You'll recall, at one point Kelsey's lawyer recommended that the couple's son would fly to Chicago to stay with him, and their daughter would stay with Camille in L.A.

Our sources say the underlying issues between the couple have not been resolved -- i.e., money and permanent custody.